study perfect your score score guide analyzing accounts ... · pdf filejournal entries...
TRANSCRIPT
Name Perfect YourScore Score
Identifying Accounting Terms 6 Pts.Analyzing Accounts Affected by Adjusting and Closing Entries 14 Pts.
Analyzing Adjusting and Closing Entries 9 Pts.Identifying the Accounting Cycle for a Service Business 8 Pts.
Total 37 Pts.
StudyGuide
8Part One—Identifying Accounting TermsDirections: Select the one term in Column I that best fits each definition in ColumnII. Print the letter identifying your choice in the Answers column.
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING Chapter 8 • 153
Answers
1. B
2. D
3. F
4. C
5. E
6. A
Column I Column II
A. accounting cycle 1. Journal entries recorded to update general ledger accountsat the end of a fiscal period. (p. 202)
B. adjusting entries 2. Accounts used to accumulate information from one fiscalperiod to the next. (p. 206)
C. closing entries 3. Accounts used to accumulate information until it istransferred to the owner’s capital account. (p. 206)
D. permanent accounts 4. Journal entries used to prepare temporary accounts for anew fiscal period. (p. 206)
E. post-closing trial balance 5. A trial balance prepared after the closing entries are posted.(p. 216)
F. temporary accounts 6. The series of accounting activities included in recordingfinancial information for a fiscal period. (p. 217)
b-te_08-study-153-156.qxd 10/29/07 5:27 PM Page 153 SECOND REVISED
154 • Working Papers TE CENTURY 21 ACCOUNTING, 9TH EDITION
Part Two—Analyzing Accounts Affected byAdjusting and Closing EntriesDirections: Use the partial chart of accounts given below. For each adjustingor closing entry described, decide which accounts are debited and credited.Write the account numbers identifying your choice in the proper Answerscolumn.
Acct.
Account Title No.Supplies 150Prepaid Insurance 160J. Nichols, Capital 310J. Nichols, Drawing 320Income Summary 330Sales 410Advertising Expense 510Insurance Expense 520Supplies Expense 550
1–2. Adjusting entry for Supplies. (p. 203)
3–4. Adjusting entry for Prepaid Insurance. (p. 204)
5–6. Closing entry for Sales. (p. 208)
7–8. Closing entry for all expense accounts. (p. 209)
9–10. Closing entry for Income Summary with a net income. (p. 210)
11–12. Closing entry for Income Summary with a net loss. (p. 210)
13–14. Closing entry for owner’s drawing account. (p. 211)
Accounts to Be
Debited Credited
1. 550 2. 150
3. 520 4. 160
5. 410 6. 330
7. 330 8. 510,520,550
9. 330 10. 310
11. 310 12. 330
13. 310 14. 320
b-te_08-study-153-156.qxd 10/29/07 5:27 PM Page 154 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING Chapter 8 • 155
1. Which accounting concept applies when a work sheet is prepared at the end of eachfiscal cycle to summarize the general ledger information needed to prepare financialstatements? (A) Business Entity (B) Accounting Period Cycle (C) Adequate Disclosure(D) Consistent Reporting (p. 202)
2. Which accounting concept applies when expenses are reported in the same fiscal periodthat they are used to produce revenue? (A) Business Entity (B) Going Concern(C) Matching Expenses with Revenue (D) Adequate Disclosure (p. 202)
3. Information needed for journalizing the adjusting entries is obtained from the(A) general ledger account Balance columns (B) income statement (C) work sheet’sAdjustments columns (D) balance sheet. (p. 204)
4. After adjusting entries are posted, the supplies account balance will be equal to (A) thecost of supplies used during the fiscal period (B) the cost of the supplies on hand at theend of the fiscal period (C) zero (D) none of these. (p. 204)
5. When revenue is greater than total expenses, resulting in a net income, the incomesummary account has a (A) debit balance (B) credit balance (C) normal debit balance(D) normal credit balance. (p. 207)
6. Information needed for recording the closing entries is obtained from the (A) generalledger accounts’ Debit Balance columns (B) work sheet’s Income Statement and BalanceSheet columns (C) balance sheet (D) income statement. (p. 207)
7. Income Summary is (A) an asset account (B) a liability account (C) a temporary account(D) a permanent account. (p. 207)
8. After the closing entries are posted, the owner’s capital account balance should be thesame as (A) shown on the balance sheet for the fiscal period (B) shown in the worksheet’s Balance Sheet Debit column (C) shown in the work sheet’s Balance Sheet Creditcolumn (D) shown in the work sheet’s Income Statement Debit column. (p. 211)
9. The accounts listed on a post-closing trial balance are (A) general ledger accounts withbalances after the closing entries are posted (B) all general ledger accounts (C) those thathave no balances after adjusting and closing entries (D) those that appear in the worksheet’s Trial Balance columns. (p. 216)
Part Three—Analyzing Adjusting and Closing EntriesDirections: For each of the following items, select the choice that best completes the statement. Print the letteridentifying your choice in the Answers column.
Answers
1. B
2. C
3. C
4. B
5. B
6. B
7. C
8. A
9. A
Part Four—Identifying the Accounting Cycle for a Service BusinessDirections: Arrange the series of accounting activities listed below for the accounting cycle for a servicebusiness. Indicate the sequence of the steps by writing a number from 1 to 8 to the left of each activity. (p. 217)
Answers
1. 4
2. 2
3. 1
4. 7
5. 5
6. 6
7. 8
8. 3
A work sheet, including a trial balance, is prepared from the general ledger.
Transactions, from information on source documents, are recorded in a journal.
Source documents are checked for accuracy, and transactions are analyzed into debit andcredit parts.
Adjusting and closing entries are posted to the general ledger.
Financial statements are prepared from the work sheet.
Adjusting and closing entries are journalized from the work sheet.
A post-closing trial balance of the general ledger is prepared.
Journal entries are posted to the general ledger.
Name Date Class
b-te_08-study-153-156.qxd 10/29/07 5:27 PM Page 155 SECOND REVISED
b-te_08-study-153-156.qxd 10/29/07 5:27 PM Page 156 SECOND REVISED
Name Date Class
WORK TOGETHER, pp. 205, 2128-1 and 8-2
8-1
Journ
aliz
ing a
nd p
ost
ing a
dju
stin
g e
ntr
ies
8-2
Journ
aliz
ing a
nd p
ost
ing c
losi
ng e
ntr
ies
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 157
34
AD
JUS
TM
EN
TS
DE
BIT
CR
ED
IT
INC
OM
E S
TA
TE
ME
NT
DE
BIT
CR
ED
IT
BA
LA
NC
E S
HE
ET
DE
BIT
CR
ED
IT
56
78
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
(b)
30
000
(a)
71
300
10
13
00
(a)
71
300
(b)
30
000
10
13
00
82
100
30
000
34
700
71
300
21
81
00
33
30
00
55
11
00
55
11
00
55
11
00
55
11
00
73
50
00
37
200
88
00
25
000
90
000
21
00
00
110
60
00
110
60
00
97
500
21
200
65
43
00
77
30
00
33
30
00
110
60
00
y
AC
CO
UN
T T
ITL
E
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Cas
h
Acc
ts. R
ec.—
Rom
elle
Woo
ds
Acc
ts. R
ec.—
Wya
tt A
mes
Supp
lies
Prep
aid
Insu
ranc
e
Acc
ts. P
ay.—
Col
in G
as
Acc
ts. P
ay.—
Gra
nd U
nifo
rms
Dar
lene
Won
g, C
apit
al
Dar
lene
Won
g, D
raw
ing
Inco
me
Sum
mar
y
Sale
s
Ad
vert
isin
g E
xpen
se
Insu
ranc
e E
xpen
se
Mis
cella
neou
s E
xpen
se
Supp
lies
Exp
ense
Net
Inco
me
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 157 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING158 • Working Papers TE
WORK TOGETHER (continued)8-1 and 8-2
July
JOU
RNA
LP
AG
E
12
34
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
DA
TE
AC
CO
UN
T T
ITL
E
DO
C.
NO
.P
OS
T.
RE
F.
GE
NE
RA
L
DE
BIT
CR
ED
IT
SA
LE
SC
RE
DIT
CA
SH
DE
BIT
CR
ED
IT
5
4
20 –
–31 31 31 31 31 31
Supp
lies
Exp
ense
Supp
lies
Insu
ranc
e E
xpen
se
Pre
paid
Ins
uran
ce
Sale
s
Inco
me
Sum
mar
y
Inco
me
Sum
mar
y
Adv
erti
sing
Exp
ense
Insu
ranc
e E
xpen
se
Mis
cell
aneo
us E
xpen
se
Supp
lies
Exp
ense
Inco
me
Sum
mar
y
Dar
lene
Won
g, C
apit
al
Dar
lene
Won
g, C
apit
al
Dar
lene
Won
g, D
raw
ing
71
300
30
000
55
11
00
82
100
30
000
34
700
71
300
33
30
00
21
00
00
71
300
30
000
55
11
00
21
81
00
33
30
00
21
00
00
Adj
usti
ng E
ntri
es
Clo
sing
Ent
ries
540
140
520
150
410
330
330
510
520
530
540
330
310
310
320
Pro
b.8-
1
Pro
b.8-
2
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 158 SECOND REVISED
Name Date Class
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 159
GENERAL LEDGER
WORK TOGETHER (continued)8-1 and 8-2
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
110Cash
July20 – –
31 7 3 5 0 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
120Accounts Receivable—Romelle Woods
July20 – –
31 3 7 2 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
130Accounts Receivable—Wyatt Ames
July20 – –
31 8 8 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
140Supplies
July20 – –
31
31 7 1 3 00
9 6 3 00
2 5 0 00
Balance ✔
4
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
150Prepaid Insurance
July20 – –
31
31 3 0 0 00
1 2 0 0 00
9 0 0 00
Balance ✔
4
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
210Accounts Payable—Colin Gas
July20 – –
31 Balance ✔ 9 7 5 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 159 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING160 • Working Papers TE
GENERAL LEDGER
WORK TOGETHER (continued)8-1 and 8-2
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
220Accounts Payable—Grand Uniforms
July20 – –
31 Balance ✔ 2 1 2 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
310Darlene Wong, Capital
July20 – –
31
31
31 2 1 0 0 00
3 3 3 0 00
Balance ✔
4
4
6 5 4 3 00
9 8 7 3 00
7 7 7 3 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
320Darlene Wong, Drawing
July20 – –
31
31 2 1 0 0 00
2 1 0 0 00Balance ✔
4
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
330Income Summary
July20 – –
31
31
31
2 1 8 1 00
3 3 3 0 00
4
4
4
5 5 1 1 00
3 3 3 0 00
5 5 1 1 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
410Sales
July20 – –
31
31 5 5 1 1 00
Balance ✔
4
5 5 1 1 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
510Advertising Expense
July20 – –
31
31 8 2 1 00
8 2 1 00Balance ✔
4
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 160 SECOND REVISED
Name Date Class
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 161
GENERAL LEDGER
WORK TOGETHER (concluded)8-1 and 8-2
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
520Insurance Expense
July20 – –
31
31
3 0 0 00 3 0 0 004
4 3 0 0 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
530Miscellaneous Expense
July20 – –
31
31 3 4 7 00
3 4 7 00Balance ✔
4
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
540Supplies Expense
July20 – –
31
31
7 1 3 00 7 1 3 004
4 7 1 3 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 161 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING162 • Working Papers TE
ON YOUR OWN, pp. 205, 2128-1 and 8-2
8-1
Journ
aliz
ing a
nd p
ost
ing a
dju
stin
g e
ntr
ies
8-2
Journ
aliz
ing a
nd p
ost
ing c
losi
ng e
ntr
ies
AC
CO
UN
T T
ITL
E
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Cas
h
Pett
y C
ash
Acc
ts. R
ec.—
Jod
i For
d
Acc
ts. R
ec.—
Mid
ville
Cen
ter
Supp
lies
Prep
aid
Insu
ranc
e
Acc
ts. P
ay.—
Beau
ty S
uppl
y C
o.
Acc
ts. P
ay.—
Mid
wes
t Tow
el
Kel
ley
Coo
per,
Cap
ital
Kel
ley
Coo
per,
Dra
win
g
Inco
me
Sum
mar
y
Sale
s
Insu
ranc
e E
xpen
se
Mis
cella
neou
s E
xpen
se
Supp
lies
Exp
ense
Uti
litie
s E
xpen
se
Net
Inco
me
34
AD
JUS
TM
EN
TS
DE
BIT
CR
ED
IT
INC
OM
E S
TA
TE
ME
NT
DE
BIT
CR
ED
IT
BA
LA
NC
E S
HE
ET
DE
BIT
CR
ED
IT
56
78
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
(b)
25
000
(a)
37
700
62
700
(a)
37
700
(b)
25
000
62
700
25
000
98
00
37
700
12
20
00
19
45
00
19
02
00
38
47
00
38
47
00
38
47
00
38
47
00
61
16
00
20
000
31
700
14
800
22
500
40
000
10
00
00
84
06
00
84
06
00
42
200
18
200
59
00
00
65
04
00
19
02
00
84
06
00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 162 SECOND REVISED
Name Date Class
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 163
ON YOUR OWN (continued)8-1 and 8-2
Feb.
JOU
RNA
LP
AG
E
12
34
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
DA
TE
AC
CO
UN
T T
ITL
E
DO
C.
NO
.P
OS
T.
RE
F.
GE
NE
RA
L
DE
BIT
CR
ED
IT
SA
LE
SC
RE
DIT
CA
SH
DE
BIT
CR
ED
IT
5
8
20 –
–28 28 28 28 28 28
Supp
lies
Exp
ense
Supp
lies
Insu
ranc
e E
xpen
se
Pre
paid
Ins
uran
ce
Sale
s
Inco
me
Sum
mar
y
Inco
me
Sum
mar
y
Insu
ranc
e E
xpen
se
Mis
cell
aneo
us E
xpen
se
Supp
lies
Exp
ense
Uti
liti
es E
xpen
se
Inco
me
Sum
mar
y
Kel
ley
Coo
per,
Cap
ital
Kel
ley
Coo
per,
Cap
ital
Kel
ley
Coo
per,
Dra
win
g
37
700
25
000
38
47
00
25
000
98
00
37
700
12
20
00
19
02
00
10
00
00
37
700
25
000
38
47
00
19
45
00
19
02
00
10
00
00
Pro
b.8-
2
Adj
usti
ng E
ntri
es
Clo
sing
Ent
ries
530
150
510
160
410
330
330
510
520
530
540
330
310
310
320
Pro
b.8-
1
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 163 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING164 • Working Papers TE
GENERAL LEDGER
ON YOUR OWN (continued)8-1 and 8-2
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
110Cash
Feb.20 – –
28 6 1 1 6 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
120Petty Cash
Feb.20 – –
28 2 0 0 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
130Accounts Receivable—Jodi Ford
Feb.20 – –
28 3 1 7 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
140Accounts Receivable—Midville Center
Feb.20 – –
28 1 4 8 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
150Supplies
Feb.20 – –
28
28 3 7 7 00
6 0 2 00
2 2 5 00
Balance ✔
8
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
160Prepaid Insurance
Feb.20 – –
28
28 2 5 0 00
6 5 0 00
4 0 0 00
Balance ✔
8
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 164 SECOND REVISED
Name Date Class
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 165
GENERAL LEDGER
ON YOUR OWN (continued)8-1 and 8-2
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
210Accounts Payable—Beauty Supply Co.
Feb.20 – –
28 Balance ✔ 4 2 2 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
220Accounts Payable—Midwest Towel
Feb.20 – –
28 Balance ✔ 1 8 2 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
310Kelley Cooper, Capital
Feb.20 – –
28
28
28 1 0 0 0 00
1 9 0 2 00
Balance ✔
8
8
5 9 0 0 00
7 8 0 2 00
6 8 0 2 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
320Kelley Cooper, Drawing
Feb.20 – –
28
28 1 0 0 0 00
1 0 0 0 00Balance ✔
8
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
330Income Summary
Feb.20 – –
28
28
28
1 9 4 5 00
1 9 0 2 00
8
8
8
3 8 4 7 00
1 9 0 2 00
3 8 4 7 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
410Sales
Feb.20 – –
28
28 3 8 4 7 00
Balance ✔
8
3 8 4 7 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 165 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING166 • Working Papers TE
GENERAL LEDGER
ON YOUR OWN (concluded)8-1 and 8-2
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
510Insurance Expense
Feb.20 – –
28
28
2 5 0 00 2 5 0 008
8 2 5 0 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
520Miscellaneous Expense
Feb.20 – –
28
28 9 8 00
9 8 00Balance ✔
8
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
530Supplies Expense
Feb.20 – –
28
28
3 7 7 00 3 7 7 008
8 3 7 7 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
540Utilities Expense
Feb.20 – –
28
28 1 2 2 0 00
1 2 2 0 00Balance ✔
8
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 166 SECOND REVISED
Name Date Class
WORK TOGETHER, p. 2198-3
Preparing a post-closing trial balance
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 167
Cash
Accounts Receivable—Romelle Woods
Accounts Receivable—Wyatt Ames
Supplies
Prepaid Insurance
Accounts Payable—Colin Gas
Accounts Payable—Grand Uniforms
Darlene Wong, Capital
Totals
Darlene’s Delivery Service
Post-Closing Trial Balance
July 31, 20 – –
CREDITDEBITACCOUNT TITLE
7 3 5 0 00
3 7 2 00
8 8 00
2 5 0 00
9 0 0 00
8 9 6 0 00
9 7 5 00
2 1 2 00
7 7 7 3 00
8 9 6 0 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 167 SECOND REVISED
ON YOUR OWN, p. 2198-3
Preparing a post-closing trial balance
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING168 • Working Papers TE
Cash
Petty Cash
Accounts Receivable—Jodi Ford
Accounts Receivable—Midville Center
Supplies
Prepaid Insurance
Accounts Payable—Beauty Supply Co.
Accounts Payable—Midwest Towel
Kelley Cooper, Capital
Totals
Cuts by Kelley
Post-Closing Trial Balance
February 28, 20 – –
CREDITDEBITACCOUNT TITLE
6 1 1 6 00
2 0 0 00
3 1 7 00
1 4 8 00
2 2 5 00
4 0 0 00
7 4 0 6 00
4 2 2 00
1 8 2 00
6 8 0 2 00
7 4 0 6 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 168 SECOND REVISED
Name Date Class
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 169
APPLICATION PROBLEMS, p. 2218-1 and 8-2
8-1
Journ
aliz
ing a
nd p
ost
ing a
dju
stin
g e
ntr
ies
8-2
Journ
aliz
ing a
nd p
ost
ing c
losi
ng e
ntr
ies
Apr
.
JOU
RNA
LP
AG
E
12
34
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
DA
TE
AC
CO
UN
T T
ITL
E
DO
C.
NO
.P
OS
T.
RE
F.
GE
NE
RA
L
DE
BIT
CR
ED
IT
SA
LE
SC
RE
DIT
CA
SH
DE
BIT
CR
ED
IT
5
12
20 –
–30 30 30 30 30 30
Supp
lies
Exp
ense
Supp
lies
Insu
ranc
e E
xpen
se
Pre
paid
Ins
uran
ce
Sale
s
Inco
me
Sum
mar
y
Inco
me
Sum
mar
y
Adv
erti
sing
Exp
ense
Insu
ranc
e E
xpen
se
Mis
cell
aneo
us E
xpen
se
Supp
lies
Exp
ense
Uti
liti
es E
xpen
se
Inco
me
Sum
mar
y
Leo
nard
Lon
g, C
apit
al
Leo
nard
Lon
g, C
apit
al
Leo
nard
Lon
g, D
raw
ing
45
000
20
000
62
33
00
80
000
20
000
31
500
45
000
14
95
00
29
73
00
10
00
00
45
000
20
000
62
33
00
32
60
00
29
73
00
10
00
00
Adj
usti
ng E
ntri
es
Clo
sing
Ent
ries
540
150
520
160
410
330
330
510
520
530
540
550
330
310
310
320
Pro
b.8-
1
Pro
b.8-
2
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 169 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING170 • Working Papers TE
GENERAL LEDGER
APPLICATION PROBLEMS (continued)8-1 and 8-2
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
110Cash
Apr.20 – –
30 7 6 0 7 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
130Accounts Receivable—Natasha Goodlad
Apr.20 – –
30 7 0 0 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
140Accounts Receivable—R. Henry
Apr.20 – –
30 4 9 8 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
150Supplies
Apr.20 – –
30
30 4 5 0 00
Balance ✔
12
8 8 1 00
4 3 1 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
160Prepaid Insurance
Apr.20 – –
30
30 2 0 0 00
4 0 0 00
2 0 0 00
Balance ✔
12
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 170 SECOND REVISED
Name Date Class
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 171
GENERAL LEDGER
APPLICATION PROBLEMS (continued)8-1 and 8-2
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
210Accounts Payable—Tri-County Supplies
Apr.20 – –
30 Balance ✔ 3 8 1 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
220Accounts Payable—West End Supply Co.
Apr.20 – –
30 Balance ✔ 5 5 5 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
310Leonard Long, Capital
Apr.20 – –
30
30
30 1 0 0 0 00
2 9 7 3 00
Balance ✔
12
12
6 5 2 7 00
9 5 0 0 00
8 5 0 0 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
320Leonard Long, Drawing
Apr.20 – –
30
30 1 0 0 0 00
1 0 0 0 00Balance ✔
12
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
330Income Summary
Apr.20 – –
30
30
30
3 2 6 0 00
2 9 7 3 00
12
12
12
6 2 3 3 00
2 9 7 3 00
6 2 3 3 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
410Sales
Apr.20 – –
30
30 6 2 3 3 00
Balance ✔
12
6 2 3 3 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 171 SECOND REVISED
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING172 • Working Papers TE
GENERAL LEDGER
APPLICATION PROBLEMS (concluded)8-1 and 8-2
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
510Advertising Expense
Apr.20 – –
30
30 8 0 0 00
8 0 0 00✔
12
Balance
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
520Insurance Expense
Apr.20 – –
30
30
2 0 0 00
2 0 0 00
2 0 0 0012
12
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
530Miscellaneous Expense
Apr.20 – –
30
30 3 1 5 00
3 1 5 00✔
12
Balance
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
540Supplies Expense
Apr.20 – –
30
30
4 5 0 00
4 5 0 00
4 5 0 0012
12
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
550Utilities Expense
Apr.20 – –
30
30 1 4 9 5 00
1 4 9 5 00✔
12
Balance
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 172 SECOND REVISED
Name Date Class
APPLICATION PROBLEM, p. 2228-3
Preparing a post-closing trial balance
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 173
Cash
Accounts Receivable—Natasha Goodlad
Accounts Receivable—R. Henry
Supplies
Prepaid Insurance
Accounts Payable—Tri-County Supplies
Accounts Payable—West End Supply Co.
Leonard Long, Capital
Totals
Len’s Laundry
Post-Closing Trial Balance
April 30, 20 – –
CREDITDEBITACCOUNT TITLE
7 6 0 7 00
7 0 0 00
4 9 8 00
4 3 1 00
2 0 0 00
9 4 3 6 00
3 8 1 00
5 5 5 00
8 5 0 0 00
9 4 3 6 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 173 SECOND REVISED
MASTERY PROBLEM, p. 2228-4
Journ
aliz
ing a
nd p
ost
ing a
dju
stin
g a
nd c
losi
ng e
ntr
ies
with
a n
et l
oss
; pre
pari
ng a
post
-clo
sing t
rial
bala
nce
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING174 • Working Papers TE
1., 2
.
JOU
RNA
LP
AG
E
12
34
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
DA
TE
AC
CO
UN
T T
ITL
E
DO
C.
NO
.P
OS
T.
RE
F.
GE
NE
RA
L
DE
BIT
CR
ED
IT
SA
LE
SC
RE
DIT
CA
SH
DE
BIT
CR
ED
IT
5
20
Oct
.20
– –
31 31 31 31 31 31
Supp
lies
Exp
ense
Supp
lies
Insu
ranc
e E
xpen
se
Pre
paid
Ins
uran
ce
Sale
s
Inco
me
Sum
mar
y
Inco
me
Sum
mar
y
Adv
erti
sing
Exp
ense
Insu
ranc
e E
xpen
se
Mis
cell
aneo
us E
xpen
se
Supp
lies
Exp
ense
Uti
liti
es E
xpen
se
Ron
Rol
stad
, Cap
ital
Inco
me
Sum
mar
y
Ron
Rol
stad
, Cap
ital
Ron
Rol
stad
, Dra
win
g
14
00
00
15
700
32
69
00
45
000
15
700
85
00
14
00
00
16
41
00
46
400
60
000
14
00
00
15
700
32
69
00
37
33
00
46
400
60
000
Adj
usti
ng E
ntri
es
Clo
sing
Ent
ries
540
140
520
150
410
330
330
510
520
530
540
550
310
330
310
320
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 174 SECOND REVISED
Name Date Class
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 175
MASTERY PROBLEM (continued)8-4
1., 2. GENERAL LEDGER
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
110Cash
Oct.20 – –
31 6 9 5 8 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
120Petty Cash
Oct.20 – –
31 1 5 0 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
130Accounts Receivable—M. Hollerud
Oct.20 – –
31 1 9 7 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
140Supplies
Oct.20 – –
31
31 1 4 0 0 00
2 1 8 0 00
7 8 0 00
Balance ✔
20
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
150Prepaid Insurance
Oct.20 – –
31
31 1 5 7 00
9 5 7 00
8 0 0 00
Balance ✔
20
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 175 SECOND REVISED
MASTERY PROBLEM (continued)8-4
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING176 • Working Papers TE
1., 2. GENERAL LEDGER
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
210Accounts Payable—Tampa Supply
Oct.20 – –
31 Balance ✔ 6 1 2 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
310Ron Rolstad, Capital
Oct.20 – –
31
31
31
4 6 4 00
6 0 0 00
Balance ✔
20
20
9 3 3 7 00
8 8 7 3 00
8 2 7 3 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
320Ron Rolstad, Drawing
Oct.20 – –
31
31 6 0 0 00
6 0 0 00Balance ✔
20
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
330Income Summary
Oct.20 – –
31
31
31
3 7 3 3 00 4 6 4 00
20
20
20
3 2 6 9 003 2 6 9 00
4 6 4 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
410Sales
Oct.20 – –
31
31 3 2 6 9 00
Balance ✔
20
3 2 6 9 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 176 SECOND REVISED
Name Date Class
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 177
MASTERY PROBLEM (continued)8-4
1., 2. GENERAL LEDGER
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
510Advertising Expense
Oct.20 – –
31
31 4 5 0 00
4 5 0 00Balance ✔
20
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
520Insurance Expense
Oct.20 – –
31
31
1 5 7 00 1 5 7 0020
20 1 5 7 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
530Miscellaneous Expense
Oct.20 – –
31
31
8 5 00Balance ✔
20 8 5 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
540Supplies Expense
Oct.20 – –
31
31
1 4 0 0 00 1 4 0 0 0020
20 1 4 0 0 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
550Utilities Expense
Oct.20 – –
31
31 1 6 4 1 00
1 6 4 1 00Balance ✔
20
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 177 SECOND REVISED
MASTERY PROBLEM (concluded)8-4
3.
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING178 • Working Papers TE
Cash
Petty Cash
Accounts Receivable—M. Hollerud
Supplies
Prepaid Insurance
Accounts Payable—Tampa Supply
Ron Rolstad, Capital
Totals
Rolstad Repair Service
Post-Closing Trial Balance
October 31, 20 – –
CREDITDEBITACCOUNT TITLE
6 9 5 8 00
1 5 0 00
1 9 7 00
7 8 0 00
8 0 0 00
8 8 8 5 00
6 1 2 00
8 2 7 3 00
8 8 8 5 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 178 SECOND REVISED
Name Date Class
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 179
CHALLENGE PROBLEM, p. 2238-5
Journ
aliz
ing a
nd p
ost
ing a
dju
stin
g a
nd c
losi
ng e
ntr
ies
with t
wo r
even
ue
acc
ounts
and a
net
loss
; pre
pari
ng a
post
-cl
osi
ng t
rial
bala
nce
1., 2
.
JOU
RNA
LP
AG
E18
12
34
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
DA
TE
AC
CO
UN
T T
ITL
E
DO
C.
NO
.P
OS
T.
RE
F.
GE
NE
RA
L
DE
BIT
CR
ED
IT
SA
LE
SC
RE
DIT
20 –
–
CA
SH
DE
BIT
CR
ED
IT
5
Sept
.30 30 30 30 30 30
Adj
usti
ng E
ntri
es
Supp
lies
Exp
ense
Supp
lies
Insu
ranc
e E
xpen
se
Pre
paid
Ins
uran
ce
Clo
sing
Ent
ries
Sale
s—L
awn
Car
e
Sale
s—Sh
rub
Car
e
Inco
me
Sum
mar
y
Inco
me
Sum
mar
y
Adv
erti
sing
Exp
ense
Insu
ranc
e E
xpen
se
Mis
cell
aneo
us E
xpen
se
Ren
t E
xpen
se
Supp
lies
Exp
ense
Ryo
Mor
riso
n, C
apit
al
Inco
me
Sum
mar
y
Ryo
Mor
riso
n, C
apit
al
Ryo
Mor
riso
n, D
raw
ing
32
00
00
40
000
49
00
00
25
00
00
78
40
00
44
000
10
000
32
00
00
40
000
74
00
00
39
000
40
000
55
000
33
00
00
32
00
00
44
000
10
000
550
130
520
140
410
420
330
330
510
520
530
540
550
310
330
310
320
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 179 SECOND REVISED
CHALLENGE PROBLEM (continued)8-5
1., 2.
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING180 • Working Papers TE
GENERAL LEDGER
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
110Cash
Sept.20 – –
30 1 8 9 8 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
120Accounts Receivable—Sandra Rohe
Sept.20 – –
30 9 5 00Balance ✔
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
130Supplies
Sept.20 – –
30
30 3 2 0 0 00
3 8 5 0 00
6 5 0 00
Balance ✔
18
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
140Prepaid Insurance
Sept.20 – –
30
30 4 0 0 00
1 6 0 0 00
1 2 0 0 00
Balance ✔
18
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
210Accounts Payable—Corner Garage
Sept.20 – –
30 5 8 00Balance ✔
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 180 SECOND REVISED
Name Date Class
CHALLENGE PROBLEM (continued)8-5
1., 2.
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 181
GENERAL LEDGER
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
220Accounts Payable—Broadway Gas
Sept.20 – –
30 Balance ✔ 1 1 0 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
230Accounts Payable—Esko Repair
Sept.20 – –
30 Balance ✔ 2 1 5 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
310Ryo Morrison, Capital
Sept.20 – –
30
30
30
4 4 0 00
1 0 0 00
Balance ✔
18
18
4 0 0 0 00
3 5 6 0 00
3 4 6 0 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
320Ryo Morrison, Drawing
Sept.20 – –
30
30 1 0 0 00
1 0 0 00Balance ✔
18
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
330Income Summary
Sept.20 – –
30
30
30
7 8 4 0 00 4 4 0 00
18
18
18
7 4 0 0 007 4 0 0 00
4 4 0 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
410Sales—Lawn Care
Sept.20 – –
30
30 4 9 0 0 00
Balance ✔
18
4 9 0 0 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 181 SECOND REVISED
CHALLENGE PROBLEM (continued)8-5
1., 2.
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING182 • Working Papers TE
GENERAL LEDGER
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
420Sales—Shrub Care
Sept.20 – –
30
30 2 5 0 0 00
Balance ✔
18
2 5 0 0 00
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
510Advertising Expense
Sept.20 – –
30
30 3 9 0 00
3 9 0 00Balance ✔
18
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
520Insurance Expense
Sept.20 – –
30
30
4 0 0 00
4 0 0 00
4 0 0 0018
18
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
530Miscellaneous Expense
Sept.20 – –
30
30 5 5 0 00
5 5 0 00Balance ✔
18
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
540Rent Expense
Sept.20 – –
30
30 3 3 0 0 00
3 3 0 0 00Balance ✔
18
ACCOUNT NO.
DATE ITEMBALANCE
DEBIT CREDIT
POST.REF.
ACCOUNT
DEBIT CREDIT
550Supplies Expense
Sept.20 – –
30
30
3 2 0 0 00
3 2 0 0 00
3 2 0 0 0018
18
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 182 SECOND REVISED
Name Date Class
CHALLENGE PROBLEM (continued)8-5
3.
Chapter 8 Recording Adjusting and Closing Entries for a Service Business • 183
Cash
Accounts Receivable—Sandra Rohe
Supplies
Prepaid Insurance
Accounts Payable—Corner Garage
Accounts Payable—Broadway Gas
Accounts Payable—Esko Repair
Ryo Morrison, Capital
Totals
LawnMow
Post-Closing Trial Balance
September 30, 20 – –
CREDITDEBITACCOUNT TITLE
1 8 9 8 00
9 5 00
6 5 0 00
1 2 0 0 00
3 8 4 3 00
5 8 00
1 1 0 00
2 1 5 00
3 4 6 0 00
3 8 4 3 00
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 183 SECOND REVISED
CHALLENGE PROBLEM (concluded)8-5
4.
COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING184 • Working Papers TE
Ryo Morrison’s expenses exceeded the amount of his sales. One way to improve is to reduce his
expenses. In particular, he might investigate if it is normal to spend so much on utilities supplies in
one month or whether he could reduce his monthly rent. Another way to improve is to increase his
total revenue. There are two ways to increase revenues: (1) increase volume, which means to sell
more services, and (2) increase prices. However, Mr. Morrison must be careful if he increases prices.
An increase in prices can cause fewer sales, which may decrease overall revenue.
BTE_Ch08-157-184.qxd 10/29/07 5:30 PM Page 184 SECOND REVISED